Nearer to moment of truth By Sanya Oni

Rauf-AregbesolaWith most states of the federation presently surviving on the financial lifeline packaged by Abuja, and with majority practically living only for the present, we must put it to the nature of the times that our attitudes to crisis have neither reflected the gravity of the situation we currently face, nor has it elicited the kind of radical measures that would ordinarily be expected in the circumstance.

By itself, the extraordinary measure of shelling out N338 billion to bailout some nearly one score insolvent states ought to ominous enough. However, merely by the emerging attitude both at the level of governments and the labour unions, there is almost the temptation to see the emerging development as nothing unusual; and that just because the nation has been through this route before, that it would somehow manage to pull through. That probably explains the demands on the governors of the affected states to simply get on with the business of sharing the windfall.

Now, no matter how one looks at the bailout package itself, it must be admitted that the intervention, in the circumstance, makes eminent sense. It is after all, elementary economics that massive injection of cash would give fillip to the economies of the states, shore up demand for good and services and generally boost economic activities. Beyond that, short of practically shutting down the states’ bureaucracies and hence the states’ infrastructure of governance and hence risk possible destabilisation of the polity, the options available to the federal government would appear limited.

So – here we are with 19 out of the 36 states collecting the huge sums with no strings attached, on terms that ordinarily qualify as extremely generous and as some have argued, tended to reward fiscal indiscipline and profligacy. I must say that the latter point is not without some merits. This is to the extent that no questions are asked about how the individual states got into the mess; their plan get out of the hole; and as far as anyone can see, no verifiable premise  on the basis of which the lending authorities can make informed judgment about the abilities of the state to pay what they have collected. Here, the assumption appears to be that there is no limit to the extent to which sovereign debts can be pushed down the road since there would always be something in the distributive pool to share. So, as always, life goes on.

The trouble here is that our nightmares have only just begun. To start with, in the unlikelihood of imminent recovery in crude prices whether in the short, medium or long term, the federal government has merely helped to postpone the evil day. If the call by some governors on their workers to understand that there will still be governments to run after the settlement of the arrears of wages; or that the bailout is nothing more than a temporary balm; and that those outside of the public service are just as entitled to their share of the bailout via improved service delivery; if these and many such calls have been heard at all, the message does not appear to have sunk in. In the event of the failure of the state governments to re-order their priorities, hearken to the call to realign their bloated bureaucracies, cut down on wastes while boosting their internally generated revenues, that message would certainly dawn much sooner than later.

Those sufficiently knowledgeable about the events of the eighties which eventuated in the unwelcome intervention by the International Monetary Fund (IMF) and the painful adjustments visited on the economy ought to be able to recognise the tell-tale signs of a looming financial Armageddon. Much as we pretend that we are nowhere there yet, the same old symptoms of insolvency, trade and currency imbalances are such that we can ignore them to our peril. It seems to me only a matter of time before something gives.

And what can we do? I must confess that there is not much we can do as far as the price of our main export product is concerned. However, the much that can be said of the Buhari administration in the last few months is its resolve to confront the multiple demons of corruption headlong and to get behemoth institutions like the Nigerian National Petroleum Corporation (NNPC), Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) to play strictly by the rules by remitting their revenues appropriately to the federation account. Now, with all the hues and cries about the operation of the Treasury Single Account (TSA) as having the potential to hobble the operations of some agencies, overall, it is somewhat accepted that the measure has become necessary to stop further bleeding of the national treasury.

Of course, there is still the question of what to do with fuel subsidy which currently gulps billions but which the Buhari administration thinks is the least of our problems.

However, good as some of the measures already in place are, it must be said that they are not nearly sufficient given the magnitude of the problem. For even if we block all the avenues of waste, bring corruption to the barest minimum, there is little indication that what would be available would still suffice to go round, let alone to service the needs of the bureaucracy or fund the yawning infrastructure gaps.

Beyond all of these is the more problematic issue of what to do with our current distributive federalism with its premium on sharing which in my view, is our number one problem.

This is where my sympathy goes to the governors. It is their tough luck that that they have found themselves in a mess they didn’t create. To the extent that it is how things have always been, they are merely the victims of a distorted fiscal practice that have persisted for so long.

My problem is the whining and moaning currently going on in most Government Houses. If one expected fresh thinking on the crisis, yours truly has found absolutely none. Save the wild embrace of the Buhari palliative across the land. As with all things easy and cheap, the bitter reality awaits sooner than later. That will be the ultimate moment of truth – for everyone.

‘My problem is the whining and moaning currently going on in most Government Houses. If one expected fresh thinking on the crisis, yours truly has found absolutely none. Save the wild embrace of the Buhari palliative across the land. As with all things easy and cheap, the bitter reality awaits sooner than later. That will be the ultimate moment of truth – for everyone’

NATION

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